Correlation Between STEEL DYNAMICS and Capgemini
Can any of the company-specific risk be diversified away by investing in both STEEL DYNAMICS and Capgemini at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining STEEL DYNAMICS and Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STEEL DYNAMICS and Capgemini SE, you can compare the effects of market volatilities on STEEL DYNAMICS and Capgemini and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in STEEL DYNAMICS with a short position of Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of STEEL DYNAMICS and Capgemini.
Diversification Opportunities for STEEL DYNAMICS and Capgemini
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STEEL and Capgemini is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding STEEL DYNAMICS and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE and STEEL DYNAMICS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on STEEL DYNAMICS are associated (or correlated) with Capgemini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capgemini SE has no effect on the direction of STEEL DYNAMICS i.e., STEEL DYNAMICS and Capgemini go up and down completely randomly.
Pair Corralation between STEEL DYNAMICS and Capgemini
Assuming the 90 days trading horizon STEEL DYNAMICS is expected to under-perform the Capgemini. In addition to that, STEEL DYNAMICS is 1.74 times more volatile than Capgemini SE. It trades about -0.34 of its total potential returns per unit of risk. Capgemini SE is currently generating about -0.03 per unit of volatility. If you would invest 15,970 in Capgemini SE on October 11, 2024 and sell it today you would lose (115.00) from holding Capgemini SE or give up 0.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STEEL DYNAMICS vs. Capgemini SE
Performance |
| Timeline |
| STEEL DYNAMICS |
| Capgemini SE |
STEEL DYNAMICS and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STEEL DYNAMICS and Capgemini
The main advantage of trading using opposite STEEL DYNAMICS and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STEEL DYNAMICS position performs unexpectedly, Capgemini can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Capgemini will offset losses from the drop in Capgemini's long position.| STEEL DYNAMICS vs. China Resources Beer | STEEL DYNAMICS vs. Titan Machinery | STEEL DYNAMICS vs. FARM 51 GROUP | STEEL DYNAMICS vs. Federal Agricultural Mortgage |
| Capgemini vs. STEEL DYNAMICS | Capgemini vs. Nippon Steel | Capgemini vs. Aegean Airlines SA | Capgemini vs. Insteel Industries |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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